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Old 08-04-2007, 01:00 PM
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Arrow VW says plans for SA ??™purely speculative??™

VOLKSWAGEN is considering plans to shift production of its popular Golf model from SA to Germany, company sources were quoted as saying on Friday. However, a Volkswagen statement released in SA dismissed the report as "purely speculative" and said "no decisions have been taken with regard to rationalising future" Golf production platforms within the VW Group.

The sources were quoted by the newspaper Wolfsburger Allgemeine Zeitung as saying that production of the right-hand drive model for the Asia-Pacific region would be moved from Uitenhage to VW??™s main manufacturing plant at Wolfsburg. Production would move from mid-2008 after alternatives for the South African plant had been decided, they said.

Industry sources said the background to the planned shift in production was a pledge made by the VW board to Germany??™s IG Metall trade union during wage negotiations earlier this year.

The company promised to introduce a new model to the Wolfsburg plant in exchange for an agreement by employees to work longer hours without additional pay. Bringing the right-hand drive Golf to the German plant would mean an extra 40 000 to 45 000 vehicles per year.

This will save 1 100 jobs faced with the axe because of improved productivity and changes related to the introduction of a new Golf model in late 2008. Volkswagen expects to produce 480 000 vehicles at the Wolfsburg plant at the end of next year.

Last month, the firm announced that pre-tax profits for the first six months quadrupled as it delivered a record 3,1-million vehicles to customers.

Europe??™s largest car maker predicted its sales for the full year at "well above 6-million vehicles," compared with 5,7-million last year, with China, South America and Eastern Europe driving the rise.

Relocating production from Uitenhage, near Port Elizabeth, would be a major blow for the SA plant, a third of whose production revolves around the right-hand drive Golf.

In addition to the Golf, the plant also produces smaller Polo models. The Wolfsburger Allgemeine Zeitung said another Polo model might be produced in Uitenhage as compensation.

The VW statement said that "if at some future stage it was decided to rationalise" production of the Golf and its sister car Jetta in Europe, "the Golf and Jetta brands would continue to be marketed in SA" where VW employs about 6 600 people.

"At the same time, in terms of the principles and objectives of the Motor Industry Development Plan, an alternative production platform would be established in South Africa enabling Volkswagen of South Africa to optimise production volumes to both domestic and export markets," the statement said.

"This possible strategy would then ensure job retention and would ensure no threat to established brands such as Golf and Jetta in the South African market."

Volkswagen earlier transferred Golf assembly from its plant in Brussels to Germany, prompting major protests in Belgium after thousands of jobs were lost.

In the meantime, VW subsidiary Audi has taken over the Brussels plant and is soon to produce the new Audi A1 model there.

Source: [url=http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A531850]Business Day[/url]
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